Asked by kyaira jackson on Jun 16, 2024
Verified
A taxpayer with a rental activity may be allowed up to $25,000 of rental losses against other (active or portfolio)income.
Rental Losses
Financial losses incurred from renting out property, often deductible under specific conditions on a taxpayer's return.
Active Income
Earnings received from direct labor or active business activities, as opposed to passive income from investments.
Portfolio Income
Income from investments, including dividends, interest, and capital gains, excluding active business income.
- Comprehend the scenarios in which it is permissible to offset other income with losses from rental property.
Verified Answer
NQ
nurse queenJun 17, 2024
Final Answer :
True
Explanation :
This is true under certain circumstances. The $25,000 allowance is limited to taxpayers with adjusted gross income of $100,000 or less, and the allowance phases out for incomes over $100,000. Additionally, the taxpayer must actively participate in the rental activity to claim the allowance.
Learning Objectives
- Comprehend the scenarios in which it is permissible to offset other income with losses from rental property.